Retirement Plans - SEP IRA Taxation
Employer’s contributions to a SEP IRA are immediately tax-deductible by the employer. Contributions are not taxed at the employee’s rate until the employee withdraws the funds. Employees may begin to withdraw money from the plan at age 59.5. All withdrawals are taxed as ordinary income and withdrawals prior to age 59.5 are subject to a 10% penalty tax.
IRA Contributions, Accounts And Investments